The National Statistical Office (NSO) produces and disseminates data under provisions of the Statistics Act 1967 in the Laws of Malawi. The Statistics Act specifies the tasks and duties of the NSO. It addresses confidentiality issues and protects the confidentiality of individual responses to surveys or census conducted by the NSO.

Duties and responsibilities: (Chapter 27:01 section 4):

To collect, compile, analyze, abstract and to publish statistical information.

Generally to organize a coordinated scheme of statistics relating to Malawi.

To ensure that common definitions for statistical purposes are used in respect of all official statistics collected or published by any department of the government.

Approval of statistical enquiries requiring returns from more than five respondents conducted by any government department, local authority or public or statutory body.

Information collected under this act shall be used for statistical purposes only, and, except for the purposes of prosecution under this Act:

No individual return or part thereof, or any copy of such return or part, made for the purpose of this Act.

No answer given to any question put for the purpose of this Act.

No report, abstract or document containing particulars contained in any such return or answer and so arranged as to render possible the identification of such particulars with any person, business or undertaking,

Shall be published, admitted in evidence, or shown to any person not employed in the performance of any functions under this Act.

Offences under this Act are sited in Chapter 27:01 section 8 and they are summarized as follows:

Any person employed by the National Statistical Office to perform any functions under this Act and uses the information collected for personal gains or communicates the information to other people other than those concerned in the NSO or who compiles for issue any false statistics or information or. any person who being in possession of any information, which to his knowledge has been disclosed in contravention of this Act, publishes or communicates this information to any other person shall be liable to a fine and imprisonment for one year.

Oath of Office and Secrecy Chapter 27:01 section 9:

Every person employed in the performance of any function under this Act shall before commencing such functions, make and subscribe before a magistrate or commissioner of oaths an oath.

Any person who refuses to give an answer to any question or enquiry by the National Statistical Office or any person who falsely represents oneself to be an authorized officer shall be liable to a fine and one imprisonment.

The 1967 Statistics Act is available to the public on request from the contact persons. Since the updating of the Act is in progress, the revised Act will be placed on the NSO's website. http://www.nso.malawi.net/

Sometimes there is advance notice of major changes in methodology so that the public is aware of what is happening. However, in most cases, the NSO disseminates information on methodological changes together with the data.

The National Statistical Office (NSO), which is a Government department, compiles balance of payments for Malawi. Official balance of payments data are based on the IMF's "Balance of Payments Manual", 5th Edition (BPM5).

NSO collects information under the Statistics Act 1967. See National Statistical Office - Data Integrity and Access by the Public.

Transaction Coverage: Balance of payments covers all transactions by government, households, individuals and enterprises resident in Malawi with residents in the rest of the world.

Geographic Coverage: The geographic coverage of balance of payments is the territory of the Republic of Malawi.

Unit Coverage: The balance of payments data cover, in principle, all resident units engaging in transactions with the rest of the world.

Only calendar year balance of payments data are compiled and disseminated.

Data on exports and imports are compiled on the basis of Customs documents. Exports are compiled on free on board (f.o.b.) basis. Imports are compiled on cost insurance and freight (c.i.f.) basis with an adjustment factor of 15% to scale imports to f.o.b. basis. At the moment, NSO does make some adjustments to Customs data to take into account informal cross-border trade mainly on crops like tobacco, beans and maize sold illegally across the borders in an attempt to avoid levies, among several reasons.

Data on freight and insurance on imports are estimated from the Customs documents, which result into a c.i.f. margin of 15 percent. This ratio accounts for freight payments and the cost of shipment. Travel debit figures are adjusted downwards by a factor of 50 percent reflecting overestimation arising from foreign exchange buyers who report to travel abroad for tourism when they actually come back with import commodities for sale, thereby overestimating Malawian tourist expenditures abroad. The adjustment also serves as a correction to double counting in the goods component.

There are problems in compiling the current account due to difficulties in recording and measuring informal cross-border trade that is not captured by the Customs authorities. However, the NSO does make some adjustments to Customs data to take into account informal cross-border trade mainly on crops like tobacco, beans and maize sold illegally across the borders and in an attempt to avoid levies, among several reasons. For services, the problem is that not all services performed by and for Malawian residents are covered in the system. The balance of payments survey, which was the source for private capital, and various other transactions, has not been operational since 1999 leading to problems in estimation. In the BPM5, improvements have been made on the coverage of services as can be noted in ‘Plans for Improvement’.

Meanwhile, no data are compiled on direct investment income and compensation of employees. But this will be captured through the revised Exchange Control methodology (E-Form), which the RBM is pursuing. Previously, this form captured information only on payments but the revised methodology will capture information on receipts as well.

IIP is not yet compiled but first steps have been undertaken partly by the conduct of a survey on Foreign Private Investment, which captured stock information on foreign direct investment (FDI), portfolio investment (PI) and other investment for years ending 1999 and 2000, and flows on retained earnings for 2000, as the latter could not be captured through the banking system. The second survey conducted in 2003 included transactions and captured data for 2000 and 2001. The third survey that was conducted in 2005 captured stock data for 2001 to 2004 and flow data for 2002 to 2004. The next cycle capturing information for 2004 to 2008 was not done but a cycle covering data for 2007 and 2008 was conducted in 2009 and the data is currently being processed.

Transactions are valued at market prices where they are available. Normally, values for the transactions that are obtained from companies, during, for example, business interviews, are those that reflect the market value concept. Exports of goods are valued on a free on board (f.o.b.) basis. Imports of goods are recorded on cost insurance and freight (c.i.f.) basis. A study on Malawi's imports was carried out in 1999 to determine an adjustment factor (the c.i.f. - f.o.b. margin) used for converting imports c.i.f. to f.o.b. basis. The study established the ratio to be 15 percent, which is currently being used in the adjustment process. This adjustment factor accounts for insurance payments and the cost of shipment, and is calculated periodically on the basis of the import figures.

Balance of payments for Malawi are presented in Malawi Kwacha but transactions quoted in foreign currency like the US dollar are converted to the local currency by using the annual average exchange rate prevailing in the year in which transactions take place.

Exports and imports are valued at the time that the goods cross the country's borders. Data obtained from the Exchange Control records include services, private transfers and income; recording is based on the time payments are made.

The basic data collection system for balance of payments statistics is through administrative sources and survey reports. The NSO obtains statistics from various sources as follows: NSO (data from Annual Statement of External Trade, Tourism Report, Quarterly Statistical Bulletin and Statistical Yearbook, among others); the Reserve Bank of Malawi (RBM) (data on monetary movements relating to Government transactions, concurrently with the Ministry of Finance (MOF), and the various transactions subject to exchange control).

Exports and Imports of Goods: The primary source is the foreign trade statistics prepared by the Foreign Trade section of the NSO on the basis of data on import and export declarations for goods collected by the Malawi Revenue Authority (MRA) through bills of entry. These forms capture the physical items crossing the border into and out of Malawi.

Transport: Data on transportation are obtained from Air Malawi, Foreign Airlines, BP Malawi, Civil Aviation Department, Exchange Control Records and Road Transport Operators. These data is obtained from E-forms as follows:

For passenger’s debit, Malawi resident passengers fares paid to foreign airlines and other forms of transportation are obtained from the E-forms where as for credit we obtain receipts by Air Malawi from non-residents passenger fares.

For freight 65% of total freight is attributed to sea transportation the other component is c.i.f. margin adjusted by the contribution of insurance (which actually go to the insurance service) which is about 0.525 percent. Receipts on freight handled by Air Malawi for non residence is another source of credits while on debit it is assumed that 10 percent of total freight is attributed to air transportation. The other component is c.i.f. margin adjusted by the contribution of insurance.

Landing fees received by Civil Aviation Department for provision of airport landing facilities to non-resident airlines as credit and landing fees, maintenance and repair plus IATA payments made by Air Malawi to non-residents for the debit side.

Travel: Data for Travel are obtained from Ministry of Tourism, Tourism Statistics Section of the National Statistics Office, Travel Agents, Hotel expenditures by non-residents and Immigration Department which is under the Ministry of Home Affairs and Internal Security.

Payments of Malawi resident tourists abroad obtained from E-forms is the debit side while the credit side constitutes expenditure of non-residents. These payments and expenditures consists of business and personal (health, education or others related payments and expenditures).

Communication: The sources are postal cooperation companies, courier service providers and telecommunication operators. This information is obtained twice a year from Business Interview survey.

Insurance Services: For Life insurance and pension funding, we use insurance payment (non-merchandise) for annuity services – withdraws made on insurance sourced from E-forms.

For freight insurance, it represent about 0.525 percent of c.i.f. which is not very different from the estimates put up by insurance companies (from 0.4 to maximum of 1%).

Personal Cultural and Recreation Services: Film rental payments associated with the distribution of films sourced from E-forms. Subscription abroad for membership of clubs, libraries, professional and trade associations, political parties, sundries sourced from E-forms.

Government Services: For credit: Transactions of foreign embassies and consulate with Malawi residents which include transaction for goods and services and personal expenditure incurred by foreign diplomats and consular staff and their dependants in Malawi.

For debit we obtain embassy remittance from the Reserve Bank of Malawi Cashflow.

Income: Compensation of Employees including Border, Seasonal and Other Workers, we obtain wages and salaries paid to employees of foreign airlines working in Malawi for the credit side and wages and salaries paid to employees working abroad for Air Malawi for the debit side.

Reinvested earnings and undistributed branch profits – Profit accruing to an investor from the ownership of a company equity capital. For 2000 and 2001 FPC survey results were used.

Income on debt – This is in interest on affiliated external debt also called inter-company loans referred to as “other capital” in BOP language.

Portfolio Investment – This is in respect to foreign ownership of company with less than 10 percent of shares held.

Other investment: Monetary Authorities – Credit: Interest receipts on international reserves sourced from RBM Cashflow. Debit: Interest payments (penalties) of the RBM in respect of IMF loans sourced from the Debt and Aid Department (DAD) of the Ministry of Finance (MoF).

General Government - Debit: Interest payment by Central Government on external debt. Also include penalties reported as other payments as reported by DAD of MoF. We take total interest and other payments minus interest payments and other payments of RBM in respect of IMF loans.

Current Transfers: A transfer is an entry that corresponds to the provision of a good, service, financial asset, or other non-produced asset by an institutional unit to another institutional unit when there is no corresponding return of an item of economic value.

General Government: Credit: Transfers received by General Government sourced from RBM Cashflow table (BOP grants) and MoF-DAD (Project grants). Debit: Malawi’s membership contribution to international agencies and organisations sourced from E-forms.

In Reporting Country – Investment in-flows from non-residents. These are transactions between a direct investor and a direct investment enterprise (which are transactions between related parties) where foreign share holding is more than 10 percent.

Portfolio Investment: Assets – Investment in-flows in the economy to buy securities and other financial instruments. Transactions by portfolio investors are largely governed by the desire to maximize income and manage risk. It includes transactions between a direct investor and a direct investment enterprise with share holding of equal to or less than 10 percent.

Liabilities – Investment out-flows from the economy to buy securities and other financial instruments. Transactions by portfolio investors are largely governed by the desire to maximize income and manage risk. It includes transactions between a direct investor and a direct investment enterprise with share holding of equal to or less than 10 percent.

Financial Derivatives:Financial instruments that are linked to a specific indicator or commodity (or another financial instrument) through which specific risks can be traded in financial markets in their own right.

Other Investments: Assets – This is the deposits of commercial banks abroad. Banks deposits abroad – BIS (Bank of International Settlements). This information can be sourced from commercial banks. The long term (loans) data is obtained from the Financial and Economic Review of RBM in column representing loans and advances to non-residents. The figures in the tables are stock amount so we get the flows by subtracting the closing values from the opening values. For short term (currency and deposits), data is obtained from the same source.

Liabilities – Under Loans:Drawings – IMF loans/drawings by RBM as reported from DAD of MoF. Repayments – IMF loan repayments by RBM as reported from DAD of MoF.

Reserve Assets: This is the change in net foreign assets of the banking system. It includes monetary gold, special drawing rights (SDR), reserve position in the International Monetary Fund (IMF), foreign exchange (currencies and deposits and securities) and other claims. This data is sourced from the Financial and Economic Review of the RBM.

In the goods component of the balance of payments, the Quarterly Statistical Bulletin, the Annual Statement of External Trade and the Statistical Yearbook could be used by data users in assessing the reasonableness of reported data on exports and imports of goods. Other publications could also be used as cross-checks on data quality. For example, data on government operations reported in the MDPC's Economic Report and data reported on the country's international economic outlook and balance of payments contained in the RBM's Financial and Economic Review.

Sometimes there is advance notice of major changes in methodology so that the public is aware of what is happening. However, in most cases, the NSO disseminates information on methodological changes together with the data.

The balance of payments data are published in the NSO's Quarterly Statistical Bulletin and Statistical Yearbook, the "Economic Report" prepared by Ministry of Development Planning and Cooperation (MDPC) and "Financial and Economic Review" prepared by the RBM.

Annual balance of payments data are published in the following reports: the "Quarterly Statistical Bulletin" and the "Statistical Yearbook" prepared by the NSO, the "Economic Report" compiled by the MDPC, and "Financial and Economic Review" prepared by the RBM, among others. The balance of payments data for Malawi are presented in Malawi Kwacha. However, transactions quoted in foreign currency like the US dollar are converted to the local currency by using the annual average exchange rate for the year in which the transactions take place.

There are no published methodological notes on Malawi's balance of payments in any national publication. However, Malawi's notes on methodologies, compilation practices and data sources were submitted to the IMF for publication in the 2003 Balance of Payments Statistics Yearbook, Part 3. See plans for improvement below.

The Balance of Payments Technical Working Group which comprises NSO, the RBM, Malawi Investment Promotion Agency (MIPA), MoF, Ministry of Development Planning and Cooperation (MDPC) and Ministry of Industry and Trade (MoIT) conducted a survey on FPC, administered from June 2009, which captured stocks of foreign direct investment (FDI), portfolio investment (PI), other investment (OI) for years ending 2007 and 2008 and flows related to retained earnings for 2008. The results of the survey will be incorporated in the BOP.

Incorporate the results of the 5th cycle of the Survey on Foreign Private Capital in the BOP.

Improve the collection and compilation of grants/ donor aid by working in collaboration with the Debt and Aid Division (DAD) of the MOF. The bottom line is to examine, alongside the data suppliers, grants in cash and kind received by the government of Malawi, and possibly split between current and capital transfers.

NSO plans to introduce a survey on Embassies, Consulates and International Organizations (IOs) for developing good credit and debit measures in government services of the current account.

NSO plans to re-introduce the survey on Non-Profit Institutions Serving Households (NPISH) to develop more accurate measures of credit transfers in cash and kind in the current account (current transfers) and capital account (capital transfers).

To continue improving the compilation of the financial account, though it is an on-going process.

The RBM's Exchange Control forms have been reviewed and are consistent with the IMF's BPM5 classification recommendations. It is expected that the forms will capture flows not only on payments but receipts as well. Coverage includes mostly services and income, in addition to transactions in the financial account on FDI, PI and OI.

A statement regarding the compilation and methodological practices followed in preparing Malawi's balance of payments data will be prepared and availed to the public, alongside the published data, when the BPM5 framework is adopted.

Reduce the time lag in data dissemination.

Resume preparation of balance of payments reports, and probably a handbook on the same.

Technical assistance will be required in consolidating the implementation of the methodology set out in the BPM5.

Technical assistance will be required in the compilation and further analysis of IIP.

Notes:

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